The drinks company behind Tennent's lager and Magners cider has reported a slump in sales, citing a 'tough time' for hospitality firms. C&C Group, which also produces Bulmers, saw net revenues and profits decline over the past year, though it noted recent improvements despite persistent inflationary pressures.
Financial Performance
For the year ending February 28, net sales fell by 5.7% to £1.57 billion compared to the previous year. The company attributed this decline to its planned exit from contracts with Budweiser Brewing Group in Ireland and 'challenging hospitality market conditions' affecting its distribution arm. However, sales of Tennent's and Bulmers were stronger year-on-year.
Consumer Confidence and Economic Impact
C&C highlighted that 'ongoing macro-economic challenges' impacted trading, with cautious consumers limiting spending ahead of the Chancellor's autumn budget in November. Consumer confidence across the UK and Ireland has 'continued to be affected by elevated living costs, unpredictable interest rates, and geopolitical uncertainty.'
Chief Executive Roger White told the Press Association that performance has been 'a little better' in recent months. This comes ahead of a crucial summer for pubs and hospitality, with hopes that the World Cup could boost trade, though Mr White stressed the company is not 'relying too much on individual events' for strong results.
Strategic Shift
The group is shifting its strategy away from the previous 'One C&C' programme towards running distinct operating models, separating its C&C drinks brands from its Matthew Clark Bibendum wholesale business.
C&C reported pre-tax profits of £49.8 million for the year, down from £55.9 million a year earlier. Shares in the company rose 1.6% on Tuesday.
